"JPMorgan Warns of Recession and Elevated Risk of 'Unknown Unknown' Ahead of Year-End"

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Negative:

The economy is still on track to enter a recession within the next nine months according to JPMorgan, which puts the stock market at risk for a sell-off in the second half of the year. The Federal Reserve has not started cutting interest rates, which could lead to a recession at the end of this year or beginning of 2024. Stock market valuations have surged in recent months, which could lead to a painful bear market if JPMorgan’s expectation of a recession materializes. Investor positioning in equities has surged amid growing “recession fatigue”, which could lead to a lack of confidence in the market. The CNN Fear & Greed Index is in “Extreme Greed” territory, which could lead to a false sense of security. There is always the potential for a surprise black swan-type event that could disrupt markets and send stock prices lower.

Positive:

The stock market has surged about 14% in the first half of the year. The Federal Reserve has not started cutting interest rates, which could lead to a delay in a recession. Investor positioning in equities has surged amid growing “recession fatigue”, which could lead to a feeling of security in the market. The CNN Fear & Greed Index is in “Extreme Greed” territory, which could lead to a false sense of security. There is always the potential for a surprise black swan-type event that

(https://ca.finance.yahoo.com/news/recession-coming-end-stocks-struggle-002653253.html)

What strategies can investors use to protect their portfolios from the potential risks associated with a looming recession?